Kelly Leonard and Tom Yorton of The Second City talk about their new book.

Kelly Leonard and Tom Yorton of The Second City comedy theater argue that improvisational comedy and business have more in common than one might first think. In their new book, Yes, And: How Improvisation Reverses ‘No, But’ Thinking and Improves Creativity and Collaboration, they share their insights on innovation and team-building.

Wharton management professor Laura Huang recently interviewed Leonard and Yorton about their book when they visited campus as guest lecturers in the Authors@Wharton series.

An edited transcript of the conversation follows.

Laura Huang: This book had me laughing, cringing and taking notes — all at the same time. There are so many useful tidbits in here and also some really humorous anecdotes. Can you tell us about your motivations for writing Yes, And?

Kelly Leonard: Fifteen years ago, if you had said Second City was going to put its name on a business book, we would have been like, “You’re insane.” But when Tom started with the company, which was about 16 years ago, he brought with him a fresh light to the way Second City was working with clients, and he really expanded upon the business. The collaboration here was interesting because I’ve been at Second City for 26 years. It’s really stage-meets-business because Tom has a business career and I’m a theater guy. Second City is a 56-year-old theater. But what we really are is an innovation laboratory. Over about 56 years, we have had groups of people working together to create something out of nothing. We are a content creator, and we never stop. They keep doing it in these groups, and we’re very, very successful at it.

At a certain point, you go, “That’s got to be translatable.” Look at all the famous people who have leapt from the stages to the screen. I’d like to think it’s my great eye for talent. But it’s not. Because I wasn’t there when Alan Arkin started. I was there when Tina Fey started. But there’s this long tradition of building talent out of these groups to have success. When we started taking it into businesses, and having more and more success, we turned to each other — this was two, three years ago — and said, “God, we’re idiots if we don’t write this book.”

Tom Yorton: Absolutely. For me, business is an act of improvisation. TwitterFor all the planning, all the controls, all the governance, and all the things we try to do to keep the variables down, business doesn’t cooperate. The world is a gray place. This improv toolkit that we talk about is really important. It has never been more important than it is now. That was all part of the motivation for writing the book.

Huang: What I was really struck by was the way you were able to put this framework around teaching soft skills. Can you talk a little bit about these soft skills?

Yorton: I don’t think, in any part of my education, anyone ever taught me to listen. Listening is kind of important, it turns out. In fact, it’s vital…. When you improvise, you do practice it. You have to. So, there are specific listening exercises we offer in the book that people can take home with them. But you’ve got to put it into practice. Everyone understands the need to go to a gym to work out your muscles. But where do you go to work out your social skills? Improvisation is yoga for your social skills. It puts you in a mindful, present place, where you’re concentrating with eye contact with the person in front of you. You’re not thinking about before, or about after. When you’re operating “Yes, And,” which is the title of our book, you’re not saying no. You are in agreement and affirming, and you’re building something with someone else. The way you feel after you do that, especially after a three-hour improv class, is the best. If we can bring that best self into our workplace, everything gets better.

Leonard: We talk about the soft skills that separate the stars from the also-ran in business. It’s how to listen, how to read a room, how to work collaboratively on teams, how to respond to failure and how to be nimble and agile and adaptive when the unexpected happens. Those are really foreign skills to many people. You could have all the quantitative skills, and you could have all the strategy skills, and all that other stuff. They are important skills to have — make no mistake –but unless you can work well with an ensemble, create something out of nothing, and respond to the unexpected, you’re only gonna go so far in business.

“Business is an act of improvisation. For all the planning, all the controls, all the governance, and all the things we try to do to keep the variables down, business doesn’t cooperate.”–Tom Yorton

Huang: You mention this ensemble nature. The two of you are, in a sense, an ensemble that created this very comedic artistic work. A lot of it touches upon this innovation question that you brought up. Have you seen innovation change over time? You’ve both been a part of this for a long time.

Leonard: It has changed. Luckily, the world has kind of come to us. If you think about what Second City is good at, we are good at short-form content and interactive content. We create the shows with our audience…. Also, our work is rooted in games…. All these things that are completely taking over the innovation sphere are the stuff that we’ve been cooking and playing with for 56 years. And we’ve only recently began to codify it, because we’re a baby art form…. American-style improvisation really started with the Compass Players, our predecessors, 60 years ago. So, that’s really changed.

I want to touch on what you talked about with ensembles because we make a point of this… We don’t use the word “team.” We use the word “ensemble.” The late, great Sheldon Patinkin, one of our great mentors, had a great phrase. You often hear the phrase, “You’re only as good as your weakest member.” He changed it. He said, “You’re only as good as your ability to compensate for your weakest member.” The onus goes back on the ensemble. At any given time, one of us is going to be the weakest member. Wouldn’t you want someone else to pick you up when you’re that member?

Yorton: I spent 20 years on the other side of the desk. I was the clients that we now serve before I came to Second City. There are a million innovation methods, with the registered trademark, and the seven-step process, and all that stuff. That’s all fine. That’s great. We think one of the greatest barriers to innovation, period, is this: We talk about this idea of respecting things, but not revering things. When you’re so reverential about a product, a company, a leader, a category, you’re not willing to see its failings. You’re not willing to see what’s incomplete about it. So, respect what you work with, but ultimately don’t hold it in such reverence that you can’t imagine it being something different. So, all the process in the world is only so good if you’re willing to actually challenge the status quo in the first place.

Huang: That’s such a great point. One of the things I really loved from the book was when you talk about failure and how success is a series of failures. Failure is embedded in success.

Leonard: Right. Yet, we live in a country that says, “No failure.” We live in a world where business is like, “You can’t fail.” But the reality is, we all fail every day, and we’re gonna fail, and especially the people who have success. Every success story is rooted in all these little failures. At Second City, we have a failure methodology. We have a failure format. The two-act scripted revue that you pay your good money to see, everyone’s gonna love, and they laugh, because we’ve tested it out. The place we’ve tested it out is in the Third Act, which is free. It’s late at night. Many people leave. A lot of college kids line up to come see it. That’s our improv set. That is our failure laboratory. We try out material. It doesn’t work. It’s OK. I didn’t pay anything. And that is a failure model. It’s not just that we have this to test out with the audiences, but for the employees — in this case, the actors. They get to model failure. They get to survive failure. They get to fail and bring something back.

[Learn] how to fail elegantly and [learn] how to incorporate failure into your daily activity, so it doesn’t beat you into the ground….. It’s like, “No, that happens. This is a process.” So, we have that model. What we recommend for businesses is, find your improv set. Places where you can fail fast [and] fail free of fear….

Huang: I work with a lot of early-stage start-ups. This failure is intrinsic in what they’re doing. The question is, also, how do you know when you should continue pivoting on your failures or when you should throw in the towel and say, “This is not working. It’s time to move onto something else. Let’s try something new altogether?”

Yorton: That’s a tough one, and there’s no stock answer to that, especially in a start-up world. [There are] a lot of other factors: Did you run out of money?… Sometimes there are things outside of your own control that kind of dictate where you need to go. But I think for us, we are more resilient. We are more willing to go the next step, and try it again, and give it another shot. When you think you should bail, try it another time or two and see what happens before you throw in the towel.

“Everyone understands the need to go to a gym to work out your muscles. But where do you go to work out your social skills? Improvisation is yoga for your social skills.”–Tom Yorton

Leonard: If you create in a model where you’re ‘Yes, And’ing’ at the start — every idea gets a little love — you have an abundance of ideas. That means the failure can move much faster because you can throw away, throw away, throw away. No one is holding onto things in such a precious manner. If you act out of ‘Yes, And’ early and create abundance, then you might not have that problem. You might get to the truth, and the good idea, more quickly.

Yorton: [A]n idea came to my mind when you were just saying that. Dishonesty in business. I don’t mean malicious, intentional dishonesty. I mean petty, unintentional dishonesty. That is where we refuse to acknowledge a failure, where we all kind of walk past it, pretend it didn’t happen, whitewash over it and still put the slogan up. We get together in the all-hands meeting and clap. But we’re not really acknowledging what’s broken. When companies do that, when organizations do that, it causes everyone else to check out, because they know there’s BS going on. There’s a high cost to not being real and not being authentic.

When we talk about failure, it’s not like we are blithely saying, “Yeah, it’s OK to fail.” We are a very high-performance culture. We have high standards, and we don’t like to fail any more than anyone else. But we know that it’s OK to talk about it, and we want to create conditions where people feel it’s OK to be open about it because then they’ll keep staying in the game. They’ll stay fully engaged, and you’re good to go.

Huang: That’s a great point. It reminds me of one of the examples you had in the book about Superman….

Leonard: There’s these classic scenes from the Second City archives. One of them is the Superman Scene. It was shortly after Christopher Reeve had fallen off the horse and was paralyzed — a tragic, tragic situation. The cast really wanted to create a scene around that. The idea they came up with was that they were sitting in a cartoon world, and there’s an evil villain, and then Superman came out, but he was in a wheelchair. The response that the audience gave was groans, if not worse. Martin Short came to a preview and just yelled, “No,” when he saw it. It wasn’t working.

The director took it out of the two-act show and put it back in the improv set, the place where we can fail and it’s OK because it’s late at night and we won’t be in trouble. [The director continued] playing around with it. It still wasn’t working and then finally came up with an idea of writing a song for Superman that he could sing about how he wished he could fly again. It was a lovely bookend that when he put it back in the scripted show, we still got that terrible groan. But after he sang the song, everyone’s like, “Oh, I’m OK with it.” It became this iconic, well-reviewed, classic scene. The director was Mick Napier, the actor is Rich Talarico. It would never have happened if we hadn’t had this little failure module to fool around with it.

Because we want to risk, and we want to create content that is challenging and edgy. But it doesn’t work if everyone’s upset. They could be upset for a little bit. But we want to bring them around again. So, a lot of our work is testing the edge. We talk about this in the book. A lot of people are practicing comedy without a license. We have studied this stuff. We have researched, and modeled it, and all that. But everyone else thinks they know how to do comedy, and that’s why everyone gets in trouble on Twitter. You’ve got to understand your context. Part of the book is also talking about that, for businesses. If you want to use comedy, there are rules that you might want to consider….

Huang: The practical exercises in the book really hit a lot of those concepts home. I personally really liked the String the Pearls exercise, where you give one phrase and another phrase, and the two are not connected; you have to get from one to the next. Do you have a favorite?

“Unless you can work well with an ensemble, create something out of nothing, and respond to the unexpected, you’re only gonna go so far in business.”–Kelly Leonard

Yorton: We do a lot of work with listening skills in business because it is so unpracticed. An exercise that we cite in the book, and we use very successfully, is something we call Last Word Response, where we instruct people to pair up, talk about anything. Have a conversation, doesn’t matter what you’re talking about. The only stipulation is, when you respond to me, you have to use the last word in my line as the first word in your response. You have these conversations, and sometimes they’re funny and nonsensical. It doesn’t much matter. The point of that exercise is, it’s difficult to listen all the way through. Critical thinkers are taught to listen to respond, not to listen to understand. We draw that distinction. We think it’s really important to listen to fully understand someone. You might miss some information, you might miss a meeting, if you check out halfway through what they’re saying so you can prepare a response.

Leonard: Here’s the thing I think people should do. Take one day, and don’t say no the entire day. Even if you’re in a situation where you have to say no, you have to find another way to get there. It will change your view. It will change how you feel. It’s hard. It is not easy. I’ve done it, and it’s problematic, especially with children. But it is ultimately very rewarding because you have put yourself out in a far more positive way. The other thing is, you start to make that list of how many times you would have said no, and it’s a lot. You recognize that really, out of the 25 times that I would have said no, 23 of them, I didn’t need to. The people around you notice it as well. When we were working on the book, I would come in in the morning early, and write from 8 a.m. to 10 a.m. My ensemble members, my staff around me, always said they knew when I was working on the book because I was a much better leader. Because I was modeling it. I was putting it in practice. I was saying it, I was writing it, I was touching it. They were like, “It’s remarkable…. We all know now, we have this game to catch you when you come out of a writing thing, because at that point, we’re gonna be able to make things happen.”

Huang: Stephen Colbert said that at least half this book is going to be good, because he knows one of you. Was he being facetious, or does he only know one of you?

Yorton: He knows [Leonard]; he doesn’t know me. What are you gonna do?

Leonard: Yeah. Stephen was in my very first cast as a producer at Second City. He was my wife’s roommate in college. We got engaged at his rehearsal dinner. He’s a great old friend and an amazing Second City success story, someone who so embodies this work. Tina Fey is another. They both really believe in improvisation and took it with them. If you look at Colbert’s staff, it’s a lot of Second City people. Same with Tina, when she was on 30 Rock and UnbreakableKimmy Schmidt….

One of the things that’s interesting about Second City is that we let talent go. In an ensemble, that’s just fine, because the ensemble is already there. Sometimes when it’s a team, it’s like, “Oh, the team falls apart.” No, this is never falling apart. We’ve never closed, for 56 years…. The show has just kept going on and morphing into the next Second City ensemble. That’s why so many people who are so proud of calling themselves alumni of the Second City know that’s a very rare group that they’re a part of.